Investing is great for those who want to look ahead with their finances and attempt to grow their savings. Of course, there are a few questions you should probably ask yourself before you think about investing.
It’s probably a good idea that you be out of existing debts (mortgage excluded) and have some emergency funds squared away before you invest. If you’ve got that sorted, and some extra monthly income to play with, you’re in a decent position to get in the game.
The thing about investing is that it’s usually more profitable to keep money tied up for as long as possible. If you think you might get the urge to go walkabout and skip off to Europe some time in the near future, it’s probably not worth locking up your money in fixed long term investments or in possibly volatile investments.
Every investment decision you make holds a degree of risk – some small, some more significant. A savings account
with a bank has a lot less risk than investing in shares whose value can change within a day. So it’s worth thinking about what you stand to lose on different investments and whether that’s something you are comfortable with. Maybe you worked for years to get that money together. Or maybe it was your tax refund and you’re more willing to risk it.
Impulsive buying can be a slippery slope in any aspects of life, but it can lead to a lot of lost money when we’re talking about investing. Smart investors try to minimise the amount of risk they’re taking by doing plenty of research about the risk and potential returns of their investments. You’ve got to be willing to put in the time and effort to do the same.
Don’t go in to investing thinking you know all there is to know from Hollywood films like The Big Short. Investing is a complex business, one that you really need to understand before you make any moves to get involved. Financial advisors are an option, but do charge a fee. You can read a little more about the basics of investing in stocks here
, and investing in property here
This information is intended to be general in nature only and might not apply to your personal circumstances. When in doubt always seek professional guidance.